What is a Construction-to-Permanent Mortgage?
Building your dream home in Wichita, KS, is an exciting journey. However, figuring out how to finance the land, the build, and the final home can feel overwhelming. That is where a construction to permanent mortgage (also known as a construction permanent loan) comes in. At The Mortgage Squad, Randy Pitts and our team of local mortgage lenders specialize in making this process as smooth as possible.
A construction loan provides the short-term funds needed to pay your builder during the construction phase. Once your home is complete, this loan transitions into a permanent mortgage. This means you do not have to worry about securing a completely new loan after the house is built. If you are comparing your options, you might also be considering a bridge swing loan for your transition, or perhaps you plan to refinance into a conventional fixed rate mortgage later. We are experts at providing second opinions on construction-to-permanent mortgages to ensure you get the best terms for your specific project.
- Streamlined financing: Manage your build and your final home loan with ease.
- Local expertise: We know the Wichita real estate and construction market inside and out.
- Flexible terms: Choose the structure that fits your budget and timeline.
One-Time Close vs. Two-Time Close: Which is Right for You?
When exploring a construction to permanent mortgage, you will typically choose between two main structures: a one-time close and a two-time close. Understanding the difference is crucial for your financial planning.
One-Time Close Construction Loan: As the name suggests, you only go to the closing table once. This single loan covers both the construction phase and the permanent financing. The biggest advantage is that you only pay closing costs once, saving you thousands of dollars. Additionally, your interest rate is locked in before construction begins, protecting you from potential rate hikes while your home is being built.
Two-Time Close Construction Loan: With this option, you secure a short-term construction loan first. Once the home is finished, you refinance that short-term loan into a permanent mortgage. While this means paying closing costs twice, it offers more flexibility. If your final build costs change, or if you want to shop around for a better rate on your permanent mortgage, a two-time close might be beneficial.
If you already have a quote from another lender, reach out to us! We are experts at providing second opinions on construction-to-permanent mortgages in Wichita, Kansas.
| Feature | One-Time Close | Two-Time Close |
|---|---|---|
| Closing Costs | Paid only once | Paid twice (construction, then permanent) |
| Interest Rate | Locked upfront | Floats until permanent loan closing |
| Flexibility | Less flexible if build costs change | Highly flexible for cost adjustments |
| Convenience | High (one application process) | Moderate (requires refinancing) |
Why Choose The Mortgage Squad for Your Construction Loan?
At The Mortgage Squad (NMLS ID 12007), we understand that building a home is one of the most significant investments you will ever make. Randy Pitts and our dedicated team in Wichita, KS, are committed to finding you the perfect home loan. We take the time to understand your budget, your timeline, and your long-term financial goals.
Whether you are a first-time homebuyer building a starter home or an experienced investor constructing a custom estate, we have the tools and expertise to guide you. From evaluating your initial construction to permanent mortgage options to providing a thorough second opinion on an existing quote, we ensure you have the confidence to move forward. Do not let the complexities of construction financing hold you back from your dream home.
Q1: What is a construction-to-permanent mortgage?
It is a financing option that provides funds to build a home and then converts into a standard mortgage once the construction is complete.
Q2: Do I have to make full mortgage payments during construction?
No. During the construction phase, you typically only make interest-only payments on the funds that have been drawn to pay the builder.
Q3: Can I use the land I already own as a down payment?
Yes! If you own the lot where your home will be built, the equity you have in that land can often be applied toward your down payment.
Q4: What if construction is delayed?
Construction loans have built-in timelines, but extensions are usually available if weather or supply chain issues cause unexpected delays.
Q5: Can The Mortgage Squad review my current construction loan offer?
Absolutely. We are experts at providing second opinions on construction-to-permanent mortgages to ensure you are getting a competitive rate and fair terms in Wichita.
Ready to break ground on your dream home?
Contact Randy Pitts Today
Or call us directly at 1-316-559-2600 for your expert construction loan consultation!